Definition

Tax Adjustments are modifications made to accounting profit to determine taxable income under UAE Corporate Tax. They ensure that only allowable income and expenses are considered.

Key points

• Non-deductible expenses (e.g., fines or donations) are added back.
• Exempt income (e.g., dividends) is subtracted.
• Adjustments align IFRS accounting with Corporate Tax rules.
• Reported in the Corporate Tax Return (Form CT1).

Practical example

A company adds back AED 50,000 in entertainment expenses not permitted for deduction under Corporate Tax.

Why it matters

Accurate tax adjustments prevent underpayment and ensure full compliance with UAE FTA regulations.